Annual home price growth slowed for the third consecutive month in July but remained historically high at 15.8%, according to the latest report by CoreLogic.
The data and analytics firm singled out mortgage rates, which were around 5.5% in July, chilled interest in home purchases and helped ease overheated and unsustainable price growth. Home prices actually declined by 0.3% from June to July, which hasn’t happened in over a decade, CoreLogic said.
“Following June’s surge in mortgage rates and the resulting dampening effect on housing demand, price growth is taking a decisive turn,” said Selma Hepp, interim lead of the Office of the Chief Economist at CoreLogic. “And even though annual price growth remains in double digits, the month-over-month decline suggests further deceleration on the horizon. The higher cost of homeownership has clearly eroded affordability, as inflation-adjusted monthly mortgage expenses are now even higher than they were at their former peak in 2006.”
CoreLogic expects to see a more “balanced” housing market in the coming year, with year-over-year appreciation slowing to 3.8% by July 2023.
Tampa, Florida again had the highest year-over-year home price increase of the country’s largest metropolitan areas in July, at 29.7%. Miami was second at 27.1%.
Florida and South Dakota posted the highest home price gains, at 29.6% and 23.7%, respectively. Tennessee ranked third with a 23.2% year-over-year increase. Washington, D.C. ranked last for home price appreciation at 2.4%.
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CoreLogic also assessed which markets it expects to experience a significant price decline. Seattle suburbs Bremerton-Silverdale, Washington topped the list, with a 70%-plus probability of home price declines. Crestview-Fort Walton Beach-Destin, Florida; Bellingham, Washington; Reno, Nevada; and Boise City, Idaho all are at risk of price declines over the next 12 months, according to CoreLogic.
